Bizav baby boomers look to sell their firms: Alderman & Company
More small to mid scale owners would like to see the sun set on their ownership of the family business, says Alderman & Co.
A rising tide of small to middle market business aviation firms – including both rotary and fixed wing specialists – are being offered for sale, as their baby boomer owners look to sell their assets, according to mergers and acquisitions specialist Alderman & Company.
Dubbed the silver tsunami, growing numbers of 65-year-old owners are giving up on persuading their children to run the family business and are deciding to sell, says the Florida-based investment bank. The bank focuses exclusively on sell-side mergers and acquisitions for companies in the middle market of the aerospace and defence industry.
In addition to family-owned enterprises, clients include micro cap public companies, smaller divisions of large corporations and mid-size portfolio companies of private equity firms. Since its launch in 2001, Alderman & Company says it has closed more than 60 deals with a transaction value of more than $2.6bn.
“Most of our clients are founder family-owned businesses,” Troy Medeiros, vice president, Alderman & Company told Helicopter Investor. “That seems to be a overarching trend that we’re seeing across our clients and also prospects.”
The company has several live acquisition deals in progress – covering helicopters and fixed-wing aircraft businesses. But why now? “We really believe that in the middle market, aerospace and defence, buyers and sellers are aligned on value.” A key factor are manufacturers’ backlogs, with increasing order books and deliveries rippling confidence through the industry. As an example, he points to Airbus making 766 fixed wing deliveries in 2024 compared with 735 in the previous year.
Silver Tsunami
“This continued increase in OEM backlogs and the continued increase in delivery rates provides confidence for the future, which really helps buyers and sellers get aligned on value,” said Medeiros. It’s a trend he expects to continue for the remainder of this year and into the future as the Silver Tsunami of business owners decide to call it a day. “Company owners will continue to explore divestiture,” he said. “Several of our clients are in the baby boomer generation.”
But those looking to sell are motivated not solely by a generational imperative – the long shadow of Covid is also at play. “Many of these baby boomer privately held company owners considered retirement during the pandemic,” explained Medeiros. “But they were unable to retire during the pandemic because of the uncertain outlook for their business. Since the general outlook is favourable now, they’re showing interest in exiting the business, primarily in pursuit of retirement.”
Worldwide, he believes it is a 50-50 between small and mid-tier manufacturers and their suppliers looking to sell their businesses. So does this reflect a generation of ungrateful children with no ambition to inherit their parents’ hard-built aviation businesses? Medeiros is reluctant to call general trends. “Some owners who want to sell do have kids in the business but are not interested in running it – probably because they’re pursuing business interests in some of the newer industries,” he explained. “Others don’t have any kids that are interested in the business or they don’t have kids at all. So, it’s very circumstantial, but we’ve had conversations on both sides of the spectrum.”
One example of Alderman’s work in facilitating the sale of a middle market business aviation supplier is the sale of Oxygen MRO Omnigas Systems to Aerox Aviation Oxygen Systems. Omnigas Systems specializes in hydrostatic testing maintenance, repair, and overhaul (MRO) services for aviation oxygen systems components and fire suppression.
‘This acquisition’
This acquisition, announced in February this year, complements and extends the new owner’s services in supplying oxygen systems engineering and manufacturing for aircraft OEMs, air medical interiors manufacturers, and other oxygen system integrators.
“Our acquisition of Omnigas Systems leverages Aerox’s deep expertise and infrastructure in developing and manufacturing aviation oxygen systems for a global customer base,” said Scott Ashton, president and CEO of Aerox after the sale. “We are excited to welcome the experienced Omnigas team into the Aerox family of companies. Omnigas Systems brings robust capabilities in both oxygen components and fire-suppression systems service and repair, as well as hydrostatic testing.”
Meanwhile, after visiting the Paris Air Show last month, William Alderman, founding partner of Alderman & Company. Alderman reported cautious optimism among both fixed-wing and rotary industry middle market suppliers – particularly those operating in the defence industry as budgets increase.
Medeiros confirmed: “People are cautiously optimistic And we’re hearing it in real time from our clients, from prospective clients and companies that we know
and talk to regularly.”
But if even if economic uncertainty and global tensions do deter baby boomer business owners from selling by the clicking clock of time cannot be denied. With no children to take over their loving-built family businesses, the luckiest generation may be forced to sell – whether they want to or not.
Troy Medeiros, vice president, Alderman & Company.
